The battle for low-cost regional routes in Asia is heating up further with Thai Airways’ announcement that it is thinking about setting up a new carrier to exploit the strong demand in this fast-growing sector. The announcement comes as the group reveals that its first quarter was strong and that it is on track to achieve its net profit target for 2012.
Regional competition is intensifying as big players such as Singapore Airlines and Cathay Pacific Airways cut frequencies on loss-making routes to Europe to focus on profitable destinations in Asia.
“We are joining with Nok Air to study a new ultra-low-cost airline,” Thai Airways President Piyasvasti Amranand explained, in reference to the group’s 49%-owned budget airline. “Nok Air will focus on domestic routes and we need another one to tap strong demand from this sector.”
Meanwhile, Thai Airways is planning to launch Thai Smile, a new mid-range airline, on July 7.